Luxury for everyone: Dubai tokenizes real estate
The mega metropolis of Dubai never fails to impress with superlatives. Especially in the real estate sector. For example, “Palm Jumeirah” is the largest artificially created island in the shape of a palm tree and an iconic luxury residential area. The Dubai Creek Tower, which is still under construction, is to become the tallest building in the world and thus replace the famous Burj Khalifa. Iconic buildings such as these can also be seen as a “statement” that underscores Dubai's ambitions in the real estate sector: The megacity wants to massively increase real estate transactions. The new pilot project for the tokenization of real estate in Dubai could also contribute to this.
Dubai real estate market: The sky is the limit
In recent years, Dubai has become one of the most dynamic real estate markets in the world established. The city benefits from its strategic location between Europe, Asia and Africa and attracts millions of tourists, expats and business people every year. This internationality is also reflected in the real estate sector: around 70% of real estate buyers are foreigners. Dubai is also interesting from a tax perspective: There is no income tax on rental income, no property tax and no inheritance tax. These conditions enable particularly high net returns, which can be between five and eight percent in prime locations — significantly more than in many major European cities. Dubai also scores points with a high quality of life, modern infrastructure and political stability.
The city wants to continue using these advantages to its advantage and is investing massively in future projects such as smart cities, green technologies and digitization — including real estate.
Real estate tokenization pilot program launched
In March 2025, the metropolis on the Persian Gulf opened the luxury real estate market to a wider audience. By digitizing ownership shares, investments in exclusive properties should no longer only be available to large investors, but also to private investors. As a result, completely new buyer segments could be reached, which should lead to a significant increase in market liquidity and depth as well as increased transaction efficiency. This would strengthen Dubai's real estate market, particularly in terms of its international competitiveness.
Specifically, this has Dubai Land Department (DLD) launched a pilot project to tokenize real estate in collaboration with the Virtual Assets Regulatory Authority (VARA) and the Dubai Future Foundation. This project is part of Real Estate Innovation Initiative (REES) and marks a significant step in the digitization of the real estate sector.
The REES initiative essentially pursues these goals:
- By closely integrating Dubai's strategies to promote virtual assets and digital innovations, the project is intended to strengthen the city's position as a leading international center for real estate tokenization.
- To create trust, a secure legal framework supported by regulators is established that guarantees transparency and good governance.
- At the same time, awareness of tokenized real estate products and virtual investment tools is being actively promoted in order to raise awareness among investors worldwide.
- In addition, Dubai should act as a magnet for world-class technology companies in the areas of blockchain, proptech and virtual assets, thus bringing new impetus to the industry.
- Ultimately, the initiative also helps to support the goals of Dubai Economic Agenda D33 by driving digitization and innovation in the real estate sector. The goal is to reach a market value of around 60 billion dirhams (around 16 billion US dollars) for tokenized real estate by 2033, which corresponds to around seven percent of Dubai's total real estate volume.
With the tokenization of real estate, Dubai is therefore positioning itself as a pioneer in combining technology and the real estate industry. Because the tokenization of real estate has the potential to revolutionize the market and offers exciting prospects for the future of real estate investments — even beyond the Emirates.
Benefits of digital assets
In general, tokenization makes it possible to break down real estate and other assets into digital shares that can be traded using blockchain technology. This has several benefits. For example, the “denomination” of expensive properties makes it easier for retail investors to access markets that were not previously open to them. This is because investors can buy (real estate) shares even with small amounts. Compared to traditional real estate investments, tokenized shares can also be traded faster and easier. As a result, investors remain flexible and can build up a diversified portfolio of tangible assets. Thanks to blockchain technology, transactions are also always comprehensible and particularly forgery-proof.
